Should I buy an apartment or a house?

Apartment vs house: Which property should you buy and why?

Last updated:

Choosing between buying an apartment or a house depends on your finances, your lifestyle and your property goals.

While some people prefer the space and flexibility of living in the suburbs, others favour the convenience of inner-city living. From price to space and maintenance requirements, both houses and apartments have several pros and cons. If you're buying a property for investment purposes this becomes a whole different question, depending on your strategy as an investor.

Whatever you choose, we've outlined the issues you need to consider and the benefits and drawbacks of both houses and apartments.

Home graphicBuying a house

Pros

  • Floor space. If you want to conquer the final frontier and get more space for your family to live in comfortably, houses offer far more room to move than apartments.
  • Outdoor space. If you have a green thumb, you want to expand your home or if you have young kids, a backyard is useful. You can build a pergola or entertaining area and enjoy the freedom of having your own outdoor space.
  • Flexibility. If you own a house, you can more or less do what you want — there are no owners’ corporation or strata laws to abide by. As long as you keep council and building regulations in mind, you’re pretty much free to renovate however you like. You can expand or upgrade the house, adding value and making the place more liveable.
  • Privacy. Another benefit of living in a house instead of an apartment is that you’re generally not living in as close proximity to your neighbours. So you can enjoy your life without having to worry about disturbing your neighbours (or being disturbed by them).

Cons

  • Maintenance. Lawns need mowing, gutters need cleaning, trees need trimming and windows need washing. A house can be a lot of work. That's fine if you love DIY projects and gardening. If you don't, the extreme low maintenance aspect of apartment living is pretty appealing.
  • Higher costs (and more bills). Living in a house is generally more expensive than living in an apartment. You have more space to heat and cool, and more furniture and equipment to buy.

Buying an apartmentApartment graphic

Pros

  • More affordable. While there are some exceptions to the rule, apartments are generally cheaper to buy than houses. According to figures from Domain Group (Domain House Price Report March Quarter 2018), Sydney’s median house price was $1,150,357. The median apartment price was just $740,041.
  • Less maintenance. You don’t have to mow the lawn or tend to the garden when you own an apartment. There’s also the fact that there are plenty of maintenance tasks that can be looked after by strata, meaning you have more free time to do whatever you want.
  • Low cost. While the reduced space of apartments can be a drawback, it also results in cheaper electricity and gas bills.
  • Location. Many apartments are built near city centres, allowing you to live closer to everything, from transport and schools to restaurants and even your work.
  • Extra facilities. Owning an apartment might also give you access to a whole host of building facilities. There could be a pool, gym, tennis courts, playground, and even a shared garden. These added inclusions need to be taken into account when deciding whether to buy an apartment or a house.
  • Security. Thieves often have to pass through several layers of security to get to your apartment door, which isn’t the case with many houses.

Cons

  • Strata/Owners’ corporation by-laws. Living in an apartment means abiding by the rules imposed by the owners’ corporation, such as not hanging washing over the balcony or not having pets in the property. If you want to renovate or upgrade your apartment, you may need to seek approval first.
  • Fees. You’ll also need to pay a fee to the owners’ corporation to cover shared maintenance costs, so remember to take this into consideration when calculating total costs.
  • Less space. Apartments don’t offer as much living space as houses.
  • Less privacy. If you don’t like listening to your neighbours fight, entertain guests or get up to anything else in the privacy of their own home – or the fact that they can probably hear you doing the same things – apartment living may not be for you.

Looking for real estate help?

Provider Details Get in touch
OpenAgent

OpenAgent logo

  • Compare 30,000+ real estate agents
  • Find the right agent and maximise your results
  • Get a free property valuation
Go to siteMore info
Commingle

Logo for Commingle

  • Compare proposals from qualified professionals
  • Access over 45,000 real estate agents
  • Free property valuation profile
Enquire nowMore info
Conveyancing Logo

Fill in your details to get free real estate agent proposals with Commingle

Receive a free property valuation, compare agent commissions and fees and choose the best real estate agent for you with Commingle.

  • Save time and money finding the right agent to sell your property.
  • Commingle is a free service that can negotiate on your behalf to get the best deal.
  • All your details will remain confidential.

Do houses or units make for better investments?

If you're investing in property the apartment versus house question looks quite different. And it comes down to your strategy and goals.

Rental income

All other things being equal, a house will bring in more rental income than an equivalent apartment. But possibly not as much as the extra purchasing cost, given that houses sell at much higher prices. If you're looking to maximise rental income while minimising expenses then an apartment might be a better fit. Crunch the numbers and work out which is better for you. But you'll also need to consider capital growth.

Capital growth

Most investors are really focused on making capital gains, which refers to the growth in value of the property. In a rapidly rising market many properties have even doubled in value over five to ten years. This investment strategy has been a huge wealth creation vehicle for many Australians and has played a large role in fuelling the recent property boom.

The data is clear: houses show much stronger capital growth than apartments. The majority of Aussies prefer houses, and owning land is seen as more valuable than owning a piece of an apartment complex high up in the sky. But this trend is slowly changing as more and more Australians live in apartments.

So if you’re trying to decide whether to invest in a house or an apartment, it’s worth looking past the type of property and examining each potential investment on its merits. Where is it located? What facilities does it offer and what other amenities are nearby? What sort of capital growth could you expect from this type of property? How much rental income could the property generate? Answering these questions will help you make up your own mind.

House vs apartment: making your decision

Regardless of whether you’re an owner-occupier or an investor, the best way to solve the apartment vs house dilemma is to consider your needs and plan ahead. For example, if you’re thinking of starting a family in a few years, is a tiny inner-city apartment really the best option? On the other side of the coin, if your kids will most likely leave home in the next few years, is a massive five-bedroom house the best solution?

Once you know what you need in a home or an investment both now and into the future, you’ll be able to decide whether an apartment or a house is right for you.

Buy a house or apartment with one of these home loans

Rates last updated October 23rd, 2019
$
Loan purpose
Offset account
Loan type
Repayment type
Your filter criteria do not match any product
Name Product Interest Rate (p.a.) Comp Rate^ (p.a.) Application Fee Ongoing Fees Max LVR Monthly Payment Short Description
2.84%
2.80%
$0
$0 p.a.
80%
Owner occupiers looking to refinance can get one of the lowest rates in the market with this variable rate mortgage. $0 application fee and $0 ongoing fees. Refinancers only.
2.84%
2.84%
$0
$0 p.a.
80%
This rate will drop to 2.84% p.a on 29 October 2019 for new and existing customers. Enjoy flexible repayments, a redraw facility and the ability to split your loan. Plus, pay no application or ongoing fees.
2.99%
3.45%
$0
$10 monthly ($120 p.a.)
90%
Buy your home and lock in a low rate for the first two years. Available with a 10% deposit. Earn Velocity Frequent Flyer Points at settlement, monthly and every three years, plus extra bonus points for a limited time.
3.02%
3.04%
$0
$0 p.a.
90%
Get a low interest rate loan with no ongoing fees. Plus you can make extra repayments and free redraw online. Available with just a 10% deposit.
3.24%
3.20%
$0
$0 p.a.
80%
Athena offers one of the lowest rates in the market for investors looking to refinance their mortgage. No ongoing fees and no application fee. Principal and interest repayments. Refinancers only.
3.12%
3.32%
$599
$10 monthly ($120 p.a.)
80%
This is a competitive, flexible variable rate suitable for borrowers with a good credit history. Borrow up to 80%.
2.99%
3.42%
$0
$10 monthly ($120 p.a.)
90%
A competitive fixed rate mortgage available with a 10% deposit. Earn Velocity Frequent Flyer Points at settlement, monthly and every three years, plus extra bonus points for a limited time.
3.14%
3.99%
$0
$0 p.a.
95%
Get a competitive 2-year variable introductory rate from BankVic and pay no application fee for a limited time. This loan is only available for eligible Victoria police, emergency services and health employees.
3.15%
3.19%
$500
$0 p.a.
95%
This mortgage combines a very sharp interest rate with a 100% offset account and it's available with a 5% deposit.
3.15%
4.16%
$600
$0 p.a.
95%
Lock in a competitive interest rate for 1 year and pay no ongoing fees. Available with just a 5% deposit and includes a 100% offset account.

Compare up to 4 providers

Aussie Home Loans Logo

Start your home loan application with expert help from Aussie.

By submitting this form, you agree to the Finder Privacy and Cookies Policy and Terms of Use

Applications are subject to approval. Conditions, fees and charges apply. Please note that you need to be an Australian citizen or permanent resident to apply.

Credit services for Aussie Select, Aussie Activate and Aussie Elevate products are provided by AHL Investments Pty Ltd ACN 105 265 861 (“Aussie”) and its appointed credit representatives, Australian Credit Licence 246786. Credit for Aussie Select products is provided by Residential Mortgage Group Pty Ltd ACN 152 378 133, Australian Credit Licence 414133 (“RMG”). RMG is a wholly-owned subsidiary of the Commonwealth Bank of Australia ABN 48 123 123 124 AFSL and Australian Credit Licence 234945. Credit for Aussie Activate products is provided by Pepper Finance Corporation Limited ACN 094 317 647 (“Pepper”). Pepper Group Limited ACN 094 317 665, Australian Credit Licence 286655 acts on behalf of Pepper. Credit services for Aussie Elevate products are provided by AHL Investments Pty Ltd ACN 105 265 861 Australian Credit Licence 246786 (“Aussie”) and its appointed credit representatives. Aussie is a trade mark of AHL Investments Pty Ltd ABN 27 105 265 861. Credit and any applicable offset accounts for Aussie Elevate are issued by Bendigo and Adelaide Bank Limited ABN 11 068 049 178 AFSL / Australian Credit Licence 237879.

Aussie is a trade mark of AHL Investments Pty Ltd. Aussie is a subsidiary of the Commonwealth Bank of Australia ABN 48 123 123 124. ©2018 AHL Investments Pty Ltd ABN 27 105 265 861 Australian Credit Licence 246786.

By submitting this form, you agree to the Aussie privacy policy.

An Aussie mortgage broker can find the right home loan for you.

  • FREE Suburb and Property Report with every appointment.
  • Access 3,000+ loans from over 20 lenders.
  • Get expert help with your loan application, including paperwork and eligibility.

Aussie Home Loans Lender Logos

The Adviser’s number 1 placed mortgage broker 7 years running (2013-2019)

Image: Shutterstock

Was this content helpful to you? No  Yes

Related Posts

Home Loan Offers

Important Information*
Logo for UBank UHomeLoan Variable Rate - Discount offer for Owner Occupiers (*now 3.09%, drops to 2.84% on 29 Oct), P&I $200K+
UBank UHomeLoan Variable Rate - Discount offer for Owner Occupiers (*now 3.09%, drops to 2.84% on 29 Oct), P&I $200K+

Take advantage of a low-fee mortgage with a special interest rate of just 2.84% p.a. and a 2.84% p.a. comparison rate.

Logo for Athena Variable Home Loan - Refinance (Owner Occupier, P&I)
Athena Variable Home Loan - Refinance (Owner Occupier, P&I)

Owner occupiers looking to refinance can get one of the lowest rates in the market with this variable rate mortgage. $0 application fee and $0 ongoing fees. Refinancers only.

Logo for Virgin Reward Me Fixed Rate Home Loan - 2 Year $300k+ Special offer (Owner Occupier, P&I)
Virgin Reward Me Fixed Rate Home Loan - 2 Year $300k+ Special offer (Owner Occupier, P&I)

Buy your home and lock in a low rate for the first two years. Available with a 10% deposit. Earn Velocity Frequent Flyer Points at settlement, monthly and every three years, plus extra bonus points for a limited time.

Ask an Expert

You are about to post a question on finder.com.au:

  • Do not enter personal information (eg. surname, phone number, bank details) as your question will be made public
  • finder.com.au is a financial comparison and information service, not a bank or product provider
  • We cannot provide you with personal advice or recommendations
  • Your answer might already be waiting – check previous questions below to see if yours has already been asked

Finder only provides general advice and factual information, so consider your own circumstances, or seek advice before you decide to act on our content. By submitting a question, you're accepting our Terms of Use, Disclaimer & Privacy Policy and Privacy & Cookies Policy.
Ask a question
Go to site